Rising Voices of Trade Unions in IT/ITES sector

IT workers

Saurobijay Sarkar


The recent death of a young employee at Ernst & Young (EY), Pune, who died due to cardiac arrest and the subsequent reaction of our finance minister Nirmala Sitaraman, drew sharp criticism from the opposition parties and the trade unions. Nirmala Sitaraman essentially made the employee responsible for her death due to ‘inability to cope with the stress’ and urged colleges , universities to conduct stress management lessons, whereas the parents of the deceased indicated clearly that she was victim of overwork, making it impossible for her to sleep or eat properly. The immediate reaction of finance minister and the government was inhuman, they could have at least ordered for a probe, which they later did due to the pressure of the opposition parties and the trade unions. The government essentially does not want to encourage any debate regarding the rigorous work pressure and the inhuman work culture inside IT and BPO sector, which in recent days have witnessed growth in terms of revenue. 

According to an article published in business standard, dated October 06, 2024, “Spending in the Indian Information Technology (IT) sector is projected to reach $138.9 billion in 2024, compared to $122.6 billion last year, with a double-digit growth rate of 13.2 per cent, according to recent projections from Gartner. The growth is expected in all major segments, including software, devices, IT services, and data centre systems.”

Another survey conducted by a business research company, observed the following:
The information sector globally will grow from $ 8508.63 billion in 2023 to $ 9039 billion in 2024 at a compound annual growth rate (CAGR) of 6.2%. It will grow to $ 12417.21 billion in 2028 at CAGR rate of 8.3%. The growth in the forecast period can be attributed to globalization of IT services, digital transformation, cybersecurity innovations, smart cities development, e-commerce evolution, hybrid work environment, cloud computing, artificial intelligence in business processes, sustainable it practices, block chain technologies as per the news-papers like business standard. The above factors may contribute for the growth, but what is omitted by the conventional newspapers is that the hire and fire policy, massive retrenchment too contribute significantly for such a growth. The Business Process Outsourcing (BPO) industry is also an important sector contributing for the growth of GDP along with IT sector but unfortunately the employees are paid much lesser salary as compared to IT sector. The BPO/ITES industry in India is worth around $40 billion and is projected to grow to $54 billion by 2025. Let us cite some facts related to manpower or workforce.

As per report by the Ministry of Electronics & IT on “India’s trillion-dollar digital opportunity”, India is poised to become a trillion dollar digital economy and could support 60 to 65 million digitally enabled jobs by 2025-26. Also, as per NASSCOM, the projected requirement of manpower for Indian IT industry itself, by the year 2026, is estimated to be around 95 lakh, for India to maintain the growth momentum in IT sector. Out of 95 lakhs, 55 lakh employees are estimated to be digitally skilled across key digital technologies such as cloud computing, AI, big data analytics and IoT etc. As of now, around 36% of workforce are women, which is a positive sign.

The BPO industry in India began in the early 1990s and as of 2023, Indian BPO industry employed over 5.4 million people. The growth of the BPO industry can be attributed to the availability of good english-speaking work force, low labor cost, and the improved IT technology and telephony. Although the IT and BPO (ITES) sectors together contribute to 7.5% of the GDP, which is significant but not a determining factor of the economy of the country as a whole.

There are several factors that contribute to mass retrenchment. 

Unplanned recruitment, project failure due to mismanagement, automation and several other factors are responsible for retrenchment / mass retrenchment. The use of chat bot replaces several call center employees and offers the owners a huge profit margin. In terms of efficiency, chatbots can only answer some formulated and defined queries of customers and not very complex queries. Hence, employing Artificial Intelligence of this nature is intended only to replace manpower and to facilitate the enterprises earn a huge profit margin.

Hence, recruitment co-exists with mass retrenchment, which has become a major phenomenon now-a-days, in this market driven, growth industry. 

The role of trade unions in IT/ITES sector

There cannot be any illusion about the concept of growth, which is an outcry of the ruling class, the industrialists, the CEOs and the corporate media. The glamour for growth is neither associated with an employee friendly attitude nor with a motive to share the gains of growth, but the only driving factor is the profits and margins. Staring from the year 2000 (The Y2K phenomenon), to till date, the facts and figures show that this growth is associated with an intermittent and sometimes prolonged crisis, which is overcome by the industrialists via overwork, retrenchments, mass retrenchment and now a phenomenon of silent retrenchment. The so-called growth attained through reduction in workforce, and work beyond hours, sometimes an average of 12-13 hours. Needless to say, this overwork and the uncertainty generates mental stress affecting the health of employees. The growth generates some employment opportunity too, but alongside, the growth also is also mainly because of the phenomenon of retrenchment and mass retrenchment (which are not just performance related retrenchment) and subsequent new recruitment at a later point of time. This is nothing but a fallout of one factor – the capitalist neo-liberal market driven economy. 

Let us cite some data related to retrenchments that occurred recently.

As per the news published in India Today dated 21 June 2024, more than 90,000 IT employees already lost job in 2024 and a lot more are still facing silent layoffs. What is this silent layoff? Instead of a mass retrenchment and providing sufficient time to employees, the Silent Layoff abruptly notify employees with a notice period of just a month or two. These retrenchments are designed in such a way that a mass uproar avoided. In 2022, the tech sector saw a sharp increase in layoffs, with major companies like Amazon, Alphabet, Microsoft, and Meta cutting thousands of jobs. The year 2023 only intensified the trend, recording a 59 percent rise in job cuts compared to the previous year. A total of 2,62,915 employees were laid off across various firms, according to Layoff.ly. Despite massive layoff in the tech industry for months, the sector shows no sign of any slowing down of job cuts. These figures explain one of the key reasons of growth in IT and ITES industry at the expense of variable capital i.e. the workforce. None of the right wing parties and trade unions right from the ruling BJP and other right wing opposition parties raised any voice against these retrenchments because it is consistent with the logic of the capital.

The so called growth in IT and ITES sector and subsequent crisis led to the emergence of a new generation of working class, who for a certain period were unorganized, however started organizing themselves in various trade unions. 

Although several attempts were made to form trade unions in the Information Technology sector, initially by AITUC in Bangalore, it came to surface in December 2014 in the context of mass retrenchments in TCS. A face book page ‘We are against TCS layoff‘ was launched to protest against the illegal retrenchment by TCS. This initiative subsequently transformed into an association or a trade union called ‘Forum for IT Employees’ namely FITE. Although TCS HR tried to deny the fact, several mid-level employees expressed the fear that they may be fired as part of a plan of restructuring and a large number of freshers may be recruited in their place. In fact, the fears came true and the retrenchment actually began. TCS asked 700 employees in Hyderabad, 470 in Bangalore, 480 in Chennai, 70 in Pune and 20 in Kochi to leave, while several hundreds were told by their managers that they would be called by the HR to initiate the process. As part of the initiative of IT workers, for the first time, demonstrations happened in Chennai, Pune, Delhi and elsewhere. 

As per the Industrial Disputes Act, 1947, a dispute against illegal retrenchment was filed before the Deputy Labor Commissioner for a conciliation between the employees represented by FITE and the employer TCS. Finally, the matter moved to Madras High Court. The Madras High Court upheld, against the wishes of IT /ITES bosses, that the techies are also workers under the act. Due to the struggle of IT workers and the union, Chennai (earlier Madras) High Court delivered a judgement in favor of the sacked TCS employee terming the retrenchment of the workman as illegal. Due to the struggle of IT workers and subsequent spread of the news, finally the mass retrenchment did not happen, but over a period, silent retrenchments did occur. Still, this was a victory especially in a situation when everyone believed that IT and ITES workers do not even know the grammar of struggle. The struggle of IT workers established a way forward. There are registered unions in Delhi, Chennai, Bangalore, Hyderabad and Pune.  In the subsequent period, IT and ITES sector witnessed demonstrations against mass retrenchments in IT and ITES giants like Cognizant, IBM etc., and in recent period, in Apple, Dell, Cisco etc. In majority of cases, IT workers faced defeat, but at least a symbol of struggle was born. 

The fundamental labor laws like Industrial Disputes Act are applicable from the very beginning everywhere in IT industry in India, although the Standing Orders Act is not applicable in states like Karnataka. In the Silicon Valley, Bengaluru, too the phenomenon of mass retrenchments and silent retrenchments take place regularly, where some trade unions wage resistance. Not only the issues of retrenchments and long working hours, IT/ITES unions took up a case of sexual harassment of a female employee of TCS in the office and urged the TCS management to take it up seriously in the year of 2023.  

Interestingly, as the facebook page of FITE reveals, in the last elections it called for the defeat of the BJP government. Although the FITE does not claim to be a wing of any left party, it appears that it is not apolitical and free from any political consciousness.

Let’s turn our focus on recent attacks on the IT/ITES workers and their struggles to resist the attack and to unionize. One such all India initiative is the formation of All India IT and ITES Employees Union. When we spoke to AIITEU working committee member Comrade Suman in Bengaluru, we came to know that it had once 350 members in Bengaluru and took up the cases of retrenchments, salary cuts, delay in freshers onboarding etc., in several IT and ITES companies. From their website, we came to know about their struggle and the important press releases, some of them are as follows:

  • Condemn Karnataka Government’s  proposal in the interests of IT/ITES sector owners to extend working hours 
  • Take up the case of delay in 6000+ freshers onboarding in companies like DXC
  • Condemn religions and caste discrimination at work places
  • Fight back the case of Jaipur BPO employee against illegal termination

Comrade Suman said that their union in Bengaluru is still handling cases of employees belonging to giants like DXC and PayTM.

Another important union functioning in Karanataka is KITU (Karnataka State IT/ITES employee union). We spoke to one of their leaders in their office at Madiwala and came to know about their protest and demonstration against Karnataka government’s recent proposal of 14 hour workday in IT sector, which was publicized in leading newspapers like The Hindu and Times of India. They call this attack as biggest ever attack on the working class by the government in favour of industrialists and call upon the entire working class, including workers of IT/ITES/BPO sector, to reject the proposed amendment of 14 hours work-day under Karnataka Shops and Commercial Establishment Act. It is to be noted that in the year of 2023, during the tenure of the communal, divisive and pro corporate BJP government in several states like Karnataka and Rajasthan, the amendments in then existing Factories Act, applicable for manufacturing, hotel, hospitals etc., was implemented. Left trade unions, parties, even the parties like Congress opposed the amendments. Now, the congress government in Karnataka too succumbed to the pressure of the corporates and tried the same, but was not successful because of the resistance from various quarters and the proposed amendment was put on hold. Prior to this, on March 16, 2024, IT and ITES employees protested against the ‘anti-worker practices’ in front of the Labour Commissioner’s office in Bengaluru. They argued that these unfair labour practices go unchecked because the IT/ITeS sector was exempted from the Industrial Employment (Standing Orders) Act (IE(SO). Needless to say, the exemption of the Standing Orders Act in Karnataka enable the industrialists, the CEOs to take easy decision of retrenchment and long working hours. Although the exemption from Standing Orders Act is in force in the state, sustained campaigns and struggles made it possible to stall the implementation of the proposal for a 14 hours work-day.

In the recent period, mass and silent retrenchment took place in companies like Cisco, Intel, IBM, Virtusa and several other firms as a part of the global retrenchment and restructuring plan and there are continuous campaigns and propaganda against these retrenchments by several IT unions.

So far, we have tried to describe the conditions in IT/ITES sector and attempts by a section of IT and ITES workers of various layers to mobilize across several unions.

Way forward

In spite of retrenchments and long working hours, the IT sector jobs are looked upon as lucrative jobs by a large section of Indian population - from marginal sections to the upper middle class. The reason is not just a media hype, but the average salary at entry level in IT sector is better compared to other sectors and draw the attention of the middle, lower middle classes and the marginal people who want their sons and daughters acquire a degree to enter the IT sector. This is echoed recently by garment workers who are one of the most oppressed in the society. As per a report by CiviDep India, published in ‘The Hindu’ dated October 4, 2024, women garment workers received wages as low as Rs. 10,000 a month, faced verbal and physical abuse and even restrictions to go to toilet. During survey, they expressed hope that their children would become IT employees and would not have to work in a garment factory. However, the inability of the state to provide a robust public education system acts as a hindrance. We support whole heartedly the struggle waged by IT and ITES workers against retrenchments, salary cuts, over work, gender discrimination, etc., but we are for the emancipation of the entire working class. 

AICCTU is working in close cooperation and in collaboration with various sections of IT workers and their unions on a democratic basis and in a spirit of solidarity. In the recent period, in Bengaluru, Kolkata and other places, a number of IT and ITES workers protested and demonstrated in solidarity with the movement for ‘Reclaim Night, Reclaim Justice for RGKAR, against the heinous rape and murder of a young doctor. This coupled with workers’ struggles against the exploitation in IT and ITES sector is a definite pointer of the potential for struggle. We should recognize this aspiration and build solidarity to strengthen the struggle as part of the entire working class movement.